SQM Reports 1Q:20 Earnings

(SQM, 19.May.2020) — Sociedad Química y Minera de Chile S.A. reported earnings today for the three months ended March 31, 2020 of US$45.0 million (US$0.17 per share), a decrease from US$80.5 million (US$0.31 per share) reported for the three months ended March 31, 2019.

Gross profit reached US$107.7 million (27.5% of revenues) for the three months ended March 31, 2020, compared to US$145.5 million (28.9% of revenues) recorded for the three months ended March 31, 2019. Revenues totaled US$392.0 million for the three months ended March 31, 2020, representing a decrease of 22.3% compared to US$504.2 reported for the three months ended March 31, 2019.

Highlights

— SQM reported net income for the three months ended March 31, 2020 of US$45.0 million, compared to US$80.5 million in same period of 2019.

— Revenues for the three months ended March 31, 2020 were US$392.0 million.

— Adjusted EBITDA margin for the first three months of 2020 reached 33.9%.

— Earnings per share totaled US$0.17 for the three months ended March 31, 2020.

— SQM will hold a conference call to discuss these results on Wednesday, May 20, at 12:00pm ET (12:00pm Chile time).

SQM’s Chief Executive Officer, Ricardo Ramos, stated: “Our sales during the first quarter of this year were significantly impacted by the COVID-19 pandemic, and it is reasonable to expect that, along with the rest of the world, we will continue to see impacts. Our first concern is, and has always been, the well-being and safety of our employees and their families, as well as our neighboring communities. Early on, with the help of experts in the field, we implemented several measures, accommodating and changing the way in which we work in an effort to safeguard the health of all of our employees and collaborators. As a result of these efforts, we have been able to continue to operate at normal levels over the past months. At the same time, we have been working with our neighboring communities to provide them support during these difficult times.”

Mr. Ramos continued, “We reported earnings for the three months ended March 31, 2020 of US$45 million, lower than what we reported for the same period last year, primarily as a result of the expected lower average lithium prices. This quarter, average lithium prices were almost 50% lower than average prices seen during the same period last year. Furthermore, the COVID-19 pandemic limited our ability to sell during the end of the first quarter, particularly in the lithium market, as Asian markets were heavily affected during the first months of this year. On the other hand, average iodine prices were over 25% higher than average prices reported during the same period last year.”

“Current global economy conditions are uncertain, making it difficult to predict the future supply and demand of the markets in which we participate. As a result, there is a chance the sales volumes and average prices we previously estimated for all of our business lines may vary. However, we believe that our sales volumes should be higher in the remaining quarters of 2020, especially in the lithium business line. We have seen some markets starting to get back to normal levels of activity while in some others, the economic activity continues at weaker levels. Fertilizers have been declared essential in most places, and the demand of some of the products that we produce and sell may not be significantly impacted by the pandemic.”

Mr. Ramos concluded by saying, “We have always maintained a strong balance sheet to allow us to react to opportunities and challenges; we reported a cash position of approximately US$1.4 billion dollars. In April, we paid back a bond of US$250 million, and our next relevant maturity is not due until April 2023. Our dividend policy, while it aims to maximize returns to investors, also considers important ratios to ensure a healthy cash position. Our capex plan for 2020 has been adjusted to US$350 million”.

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